THE MAN behind Bloombury Investment Ltd.’s supposed foreign partner has in recent months launched aggressive moves to expand his inherited multibillion-dollar gaming and media empire.
But he has done so at a time when his rank on the lists of Australia’s richest billionaires lists has been sliding steadily.
In 2005, at age 39, James Douglas Packer became Australia’s richest man after taking a majority stake in Publishing & Broadcasting Limited (PBL), following the death of his father, Kerry, in December that year.
Two years hence, Packer has dropped two slots on the list of Australia’s most affluent. He turns 41 in September with his estimated wealth down from A$7.25 billion (US$6.98 billion) in 2006 to A$6.10 billion (US$5.87 billion) this year, according to BRW magazine, Australia’s leading business magazine. BRW publishes an annual list of the 200 wealthiest individuals and families in the Land Down Under.
JAMES Douglas Packer [photo courtesy of Forbes]
Mining magnate Andrew ‘Twiggy’ Forrest dislodged Packer from the top slot. Forrest’s record fortune of A$9.41 billion (US$9.06 billion) is said to be the biggest in the 25-year history of BRW‘s Rich 200 list.
One Australian paper noted that it was the first time in 20 years that a Packer did not top the list.
Packer’s slide in Australia’s list finds corroboration in Forbes magazine’s World’s Billionaires List. He slid 59 slots down to rank No. 173 in March 2008 with a net worth of US$5.7 billion (A$5.92 billion). In the 2006 Forbes list, Packer placed No. 114, even with a smaller estimated wealth of US$5 billion (A$5.19 billion).
By most media reports, though, James Packer has been busy changing the course of PBL since 2005. First, he started spinning off PBL’s major media assets to concentrate on the more lucrative casino business. Then in May 2007, he split PBL into two separately listed companies: Crown Ltd. for its gaming ventures, and Consolidated Media Holdings Inc., (CMHI) for its media assets. Packer now sits as executive chairman in both Crown and CMHI.
CMHI includes Australia’s Channel Nine television network, 60 Australian magazines, and 25 percent of New Regency, a Hollywood cinema and television production company.
Packer’s effort to slowly diversify into gaming started in the late ‘90s, after his father named him PBL chairman. The move boosted PBL’s revenue remarkably, contributing roughly 40 percent to the company’s coffers.
The family’s fortunes, however, began in the media industry. Packer’s great-grandfather, Robert Clyde, owned two Sydney newspapers, which he passed on to son Frank — Packer’s grandfather. Frank became one of Australia’s first media tycoons.
When Frank died in 1974, Kerry Packer assumed control of PBL.
Described as a legendary gambler, Kerry had nevertheless initially resisted James’s move to acquire Crown Casino, until the project turned into a financial coup. Packer’s Crown now has casino and entertainment complexes in Melbourne and Burswood in Australia, but his gaming empire has also spread to Macau, Canada, Britain, and the United States.
The young Packer also showed his mettle in business when he partnered with SEEK Limited, Australia’s largest website for job seekers, and with Microsoft in the creation of ninemsn.com.au, Australia’s most visited site. For these initiatives, Australia’s WealthCreator website extolled James’s determination to “boldly go where no Packer had gone before.”
But last May, James Packer gave up on plans to build the tallest tower in Las Vegas, as part of a mega-casino and hotel, after failing to secure the funding needed for the project.
A few years back, he had also withdrawn from a huge casino project in Singapore, but these days, he is said to be concentrating on Asia. The Philippines is being touted as his next overnight cash machine through Bloombury Investments Ltd., which has proposed to build a US$1.14-billion entertainment complex, top-billed by a world-class casino facility, on reclaimed land along Manila Bay.
But that is if he can convince his partner in Crown, Lawrence Ho, to press on with the venture. At least two associates of Ho say they are “100 percent sure” the scion of Macau casino king Stanley Ho is not investing in the Bloombury deal, as he is content with selling gaming machines and gaming chips to Philippine casino operators.
One of the Ho associates says “it is very doubtful” that Packer would push through with the Bloombury project, on account of an agreement with Ho that “anywhere in Asia they operate, they should operate together.”
Packer has also gone into joint ventures with long-time buddy and fellow second-generation media tycoon Lachlan Keith Murdoch, elder son of News Corp.’s Rupert Murdoch. So far, however, two of their ventures have tanked.
In 2001, their telephony One.Tel was declared insolvent. The botched project cost PBL and News Corp. a total of US$1 billion.
Last year, Packer and Murdoch tried another partnership with a US$2.9-billion (A$3 billion) buyout offer for Consolidated Media Holdings, Australia’s No. 2 media group. This project was dropped last April, reportedly due to some disagreements over the price. Packer owns 38 percent of the listed firm.
The One.Tel debacle coincided with the breakup of Packer’s first marriage and reportedly made him depressed. Actor Tom Cruise, who happens to be Packer’s friend, then introduced him to Scientology.
Last May, though, reports spread that Packer had stopped taking Scientology courses after being told the group was taking advantage of his money. Yet other stories said that Packer thought he no longer needed help from the religious group because he had recovered from his personal and financial woes.
Still, other reports claim Packer had felt uncomfortable with Scientology’s beliefs that frown upon gambling. Three decades ago, Scientology founder L. Ron Hubbard had denounced gambling, saying, “An obsessive gambler is a psychotic, just like a drug addict or an alcoholic.”
James Packer, however, is not known to be particularly fond of gambling, except as a business venture. This, as well as a gentle demeanor, set him apart from his father Kerry, who was known to be blunt and had a volcanic temper.
From 1998, when he became executive chairman of PBL, the younger Packer had positioned himself as a worthy successor to his father. But while he considered his father his “mentor, teacher, and greatest fortune,” he had wanted to make a name for himself.
“I think that if I try and be, you know, a mini-version of Kerry, that I’m going to fail because he was such a larger-than-life character,” he said in an interview conducted after a state memorial service for Kerry Packer in Sydney. “So I’m going to do my best being myself.”
Sunbeam Corp.’s Albert John Dunlap, who had earned the moniker ‘Chainsaw Al’ and ‘Rambo in Pinstripes’ for his boardroom ruthlessness, was also said to be one of the biggest influences in James Packer’s life.
Dunlap, who had apprenticed under Kerry Packer, was said to have admonished James at one point: “You have to determine whether you are a James or a Jamie. If you want to play polo and take out a different model every night and go skiing, you can continue to be Jamie. But if you want to learn how to run a business, you have to become James. And James, I believe you can be a world-class executive if you want.”